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CBO cuts long-term debt forecast by 11 percentage points

The Congressional Budget Office in its annual outlook forecast debt as a percentage of GDP in 2048 to be 11 percentage points lower in this year’s extended baseline projections than it was in last year’s, owing to a decline in spending projections. That decline is because of smaller appropriations for relief and recovery efforts related to hurricanes and wildfires — which then gets projected over the long term — and because of a downward revision of average interest rates. Still, the CBO expects debt to get to “unprecedented” levels — 144% of GDP by 2049, up from 78% this year.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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